UK manufacturers have reported their weakest order books since the 2008 financial crisis, according to new figures from the Confederation of British Industry (CBI).
The CBI’s monthly industrial trends survey revealed that total order books and export order books “considerably worsened” in February as the coronavirus outbreak gathered pace.
However, some sectors such as chemicals and food and drink, reported expanding output volumes during the period between February 25 and March 13.
But this was heavily offset by a sharp drop in output from factories producing motor vehicles and transport equipment.
Companies surveyed said their stocks are currently in line with the year average, but said they expect output prices to increase in the next three months.
UK #manufacturing output volumes fell in the three months to March at a similar pace to February. Output expectations dropped to their weakest since the financial crisis, as the COVID-19 outbreak gained pace in the UK #ITShttps://t.co/DtntbR7JSYpic.twitter.com/0DoQ6EvbPw
— CBI Economics (@CBI_Economics) March 24, 2020
The CBI said 15% of manufacturers reported order books which were better than normal, while 44% of firms said orders were below expectations, providing a figure of -29% for the month. This represents a significant decline from a reading of -18% in February.
Anna Leach, CBI deputy chief economist, said: “The manufacturing sector is facing unprecedented challenges due to Covid-19, such as widespread disruption to supply chains and weakening demand due to domestic containment measures.
“With expectations for output set to fall in the coming months, it’s now more important than ever manufacturers get the support they need.”
Tom Crotty, group director of Ineos and chairman of the CBI Manufacturing Council, said: “Given the hugely challenging circumstances faced by all businesses across the country as a result of coronavirus, it is not surprising that manufacturers are also feeling the impact.
“The Government’s various support measures have been welcome, but it will be essential to keep its response under continuous review to ensure that firms get through the crisis.”